LWAY News & Events

Edward Smolyansky, the largest individual shareholder of Lifeway Foods, drew attention to critical governance concerns identified by Institutional Shareholder Services in its recent proxy analysis. Smolansky said, "In its report, ISS questioned Lifeway's approach to shareholder and proxy advisor engagement, noting that governance-related discussions were not led by the CEO or any incumbent director, but instead by the Company's Chief of Staff-who is also the spouse of CEO Julie Smolyansky. Despite holding no officer or board position, he acted as the Company's primary representative in matters that typically require direct board-level accountability. ISS further highlighted the lack of transparency surrounding this role, the absence of a clear framework for managing potential conflicts, and the fact that no directors were present to address these concerns. ISS's proxy analysis noted: Engagement with ISS was led by Lifeway's Chief of Staff rather than board members. The Chief of Staff described himself as responsible for a broad range of duties but confirmed he had no formal employment agreement, despite significant pay increases over the last two years. The board combined CEO and chair roles without strong rationale, later reversed only through a Cooperation Agreement. Additionally, a 2021 major acquisition was executed without formal board approval, raising the question of process lapses. Ongoing concerns with executive compensation, low shareholder support for pay proposals and renewal of a poison pill without shareholder vote." "ISS is effectively asking the question shareholders are now forced to ask," said Smolyansky. "Why is an unelected, non-officer family member serving as Lifeway's primary voice on governance, board independence, and shareholder relations? These aren't just superficial governance issues. They indicate that the company is being run through unofficial power structures, hidden authority, and undisclosed influences-the very problems that governance reforms are supposed to remove, not reinforce."

Lifeway Foods shareholder Edward Smolyansky, the company's largest individual shareholder, issued a statement in response to the Lifeway Board's recent press release, which Smolvansky claims contained "not only highly misleading statements but several patently false claims about the dissident nominees". Highlights of the statement include: "The Board's baseless personal attacks are an obvious attempt to distract from what truly matters: the company's persistent governance failures and recent leadership misconduct under CEO Julie Smolyansky. Instead of addressing the issues affecting shareholder value today, the Board has chosen to publish distorted and false narratives to avoid accountability...The unhinged nature of these attacks reflects a CEO and her spouse acting out of desperation, terrified of losing the control they have abused for far too long. Confident leadership does not behave this way. Entrenched leadership does." Smolyansky has formally contacted the Company to request a retraction and is presently evaluating legal options.

Lifeway Foods issued a statement in response to Edward Smolyansky's intent to nominate George Sent, Managing Director of Cascadia Capital, and the Dissident for election to the Company's Board of Directors, which read, in part, "The track record of the Dissident Nominees demonstrates they are unfit to serve on the Company's Board of Directors and lead the Company and pose a clear risk to shareholder value. The Dissident Nominees have disqualifying issues raising ethical concerns.Ed Smolyansky: Terminated for cause as Lifeway's COO in 2022; Intoxicated on multiple occasions during the performance of his duties while an employee and director of Lifeway; Subject to an emergency protection order prohibiting him from communicating with or going near Lifeway's CEO, Julie Smolyansky; Founded a direct competitor of Lifeway; Defaulted on a $10.4M mortgage; Created multiple false social media accounts to post negative false statements about Lifeway, including while he was serving as a Director of Lifeway. Ludmila Smolyansky, the Dissident's mother, with whom the Dissident files Schedule 13Ds and votes: Facing over $2.3M in federal and state tax liens. George Sent, Managing director of Cascadia Capital: As Lifeway's former Lead Independent Director and Chair of the special committee that investigated the Dissident's misconduct and recommended removing several of his titles and responsibilities, Mr. Sent's sudden willingness to align himself with the Dissident is a disturbing reversal of principle that underscores questionable judgement and deeply concerning ethics. The Dissident's personal financial distress and that of Ludmila Smolyansky, his mother, and the limited amount of shares they can sell in the aggregate each calendar year seem to be fueling their demands for a sale of the Company at any price and could cause the Dissident Nominees to vote in ways that help the Dissident and his mother personally but are not in the best interests of other shareholders...Under the current Board as adjusted in 2026, Lifeway is well positioned for continued success, whether as an independent company or in a transaction that achieves a compelling value for Lifeway shareholders. Replacing any of the Company's current directors with the dissident candidates is not in the best interests of Lifeway or its shareholders. We urge you to reject the Dissidents' solicitation on behalf of the Dissident Nominees and the Dissident's proposal and protect the value of your investment."

Edward Smolyansky announced that he has filed a Preliminary Proxy Statement with the U.S. Securities and Exchange Commission in connection with the upcoming 2025 Annual Meeting of Shareholders of Lifeway Foods. Smolyansky said, "The filing continues the effort toward comprehensive board change to finally end the long-running governance failures, value destruction, and entrenched leadership practices that have plagued the Company at the expense of its shareholders. The action seeks to replace those legacy directors most responsible for the prior board's lack of accountability and deference to management, thereby paving a clear path for a new independent Board toward long-term value creation for the Company. The proxy statement seeks support for two highly qualified director nominees - George Sent and Edward Smolyansky - as well as a non-binding shareholder proposal requesting the formation of a new Board committee composed exclusively of independent directors appointed or elected after September 30, 2025. According to the filing, this committee would be tasked with conducting reviews of Lifeway's executive leadership, strategic plan, and strategic alternatives. Mr. Smolyansky believes the December 2025 Annual Meeting is a pivotal moment for Lifeway's long-term viability. Shareholders are presented with a clear choice: partial entrenchment or the establishment of a new, truly independent board accountable for meaningful oversight and implementing credible governance practices. Mr. Smolyansky highlights the Board's continued dysfunction and reluctance to serve shareholders effectively by pointing out that as of this press release, the Company has yet to disclose the completion of its previously announced commitment to appoint two new Independent Board Members, or to disclose a definitive meeting date for the upcoming 2025 Annual Meeting."